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While the closing of one small biodiesel maker in California might not seem like big news, it’s certainly indicative of the problems facing the industry, big and small producers alike. This story from the Ukiah (CA) Daily Journal says that Yokayo Biofuels, which turned waste cooking oil into biodiesel, has closed.

[Kumar Plocher, Yokayo Biofuels’ CEO] says the biggest reason for their closure was due to a lack of government support both at the state and federal levels. He explains that the carbon credit programs, those where petroleum companies are required to buy a certain amount of renewable fuels, allowed his company to bank carbon credits, normally valued high based on demand. This year state and federal value levels were very low: the state’s due to tampering by global companies that flooded the market and at the federal’s due to the Obama administration and the EPA. “Every year the federal government is supposed to raise the requirement of renewable fuel that should be purchased. At the beginning of 2014, they did not do that; they kept it static. They waited until September to announce a tiny increase, and by that time the damage was done and carbon credits were worthless all year. Every mid-term election year, the dollar per gallon subsidy that goes to biofuels has been absent; they wait until after the election.”

“Indeed, today’s USDA report should be the closing argument in the debate over the 2014 RFS final rule,” Dinneen continued. “When farmers made their planting decisions for the 2014 season, they anticipated that the Environmental Protection Agency (EPA) and the White House would continue to enforce the statutory RFS volumes. But in one fell swoop, the EPA’s proposed rule wiped away demand for 500 million bushels of corn and grain sorghum. Now, farmers are faced with corn prices below the cost of production and the risk of returning to an era of increased reliance on federal farm program payments.”

There is a little good news in all of this. Plocher was able to sell Yokayo Biofuels’ biodiesel assets to like-minded Simple Fuels.

Corn production is now forecast at 14.5 billion bushels, up almost one percent from the previous forecast and four percent more than last year. Corn yields are expected to average 174.2 bushels per acre, up 2.5 bushels from the September forecast and 15.4 bushels above the 2013 average.

The bigger crop mean lower prices and USDA’s latest World Agricultural Supply Demand Estimate also released today. Corn supplies for 2014/15 are now projected at 15,736 million bushels, up 129 million from last month, while season average prices were lowered 10 cents to $3.10 to $3.70 per bushel. Corn used to produce ethanol, distiller’s grains and other co-products is projected at 5.125 billion bushels, while corn consumption for feed is estimated at 5.375 billion bushels.

A Louisiana biomass-to-biofuel operation received a $91 million loan guarantee from the U.S. Department of Agriculture (USDA). This news release from USDA says the agency will back the loan under the Biorefinery Assistance Program to finish building the Cool Planet plant at the Port of Alexandria in Louisiana.

The Cool Planet facilities will produce approximately 8 million to 10 million gallons of reformate per year at full capacity. Often referred to as a “drop-in” fuel, reformate is an ingredient in gasoline and jet fuel that can be added during the regular refinery process. Many biofuels, like ethanol, are fuel additives that are instead blended into a finished product to oxygenate fuel. Reformate enhances the energy content of gasoline, diesel, and jet fuel. Pine chips will be the feedstock source for the Cool Planet facility, but the company can use almost any type of renewable cellulosic material.

Another benefit of Cool Planet’s facility is that it will produce biochar, a bioenergy byproduct that has been noted for its ability to sequester carbon and potentially reduce atmospheric greenhouse gas levels.

Google Ventures, BP, ConocoPhillips, GE, Exelon and NRG Energy are also kicking in on the project, in addition to USDA’s contribution. Cool Planet is putting $50 million in its own equity into the project.

There’s more corn in the bins than there was a year ago at this time. USDA’s newest Grain Stocks report shows 1.24 billion bushels of old crop corn in all positions as of September 1, up 50 percent from the same time last year. Of the total stocks, 462 million bushels of corn were stored on farms and 774 million bushels were stored off the farm, up 68 and 42 percent from the prior year, respectively. The U.S. corn disappearance totaled 2.62 billion bushels during June-August, up from 1.95 billion bushels during the same period last year.

Meanwhile, the corn harvest nationwide is running behind average for this time of year and just a bit ahead of last year, but the crop continues to look good.

According to USDA, the condition of the corn crop remains 74% good to excellent, 60% of the crop is mature, and 12% was harvested as of Sunday. All states are behind normal pace in the harvest.

More than $780,000 has been allocated for the two-year project, which aims to demonstrate a proven water treatment and recycling technology developed by Global Restoration and a biomass conversion system developed by [AgriLife Research scientist Dr. Sergio Capareda, associate professor of biological and agricultural engineering at Texas A&M] and others at Texas A&M to produce electrical power.

Capareda says the technology demonstrations will convert dry manure produced by the milking herd at Tarleton’s dairy center into heat and electricity for on-site use. The project also plans to develop resource-conservation practices in handling wastewater and solids from animal manure at the facility while developing several spreadsheet-based monitoring systems.

“The Global Restoration group will take on the water coming out of the facility and the dairy’s lagoon, and purify the water so it may be recycled,” Capareda explained. “This generates large amounts of dry manure, which will be used by our system to generate heat and electrical power.”

Officials say the project could eliminate or at least reduce the size of open ponds, as well as offer another power and revenue stream for farmers.

Secretary of Agriculture Tom Vilsack made the USDA announcement while in North Carolina to highlight USDA’s investments in rural renewable energy projects being funded through USDA Rural Development’s Rural Energy for America Program (REAP). Vilsack visited Progress Solar in Bunn, N.C., which received a $3.4 million REAP loan guarantee in 2012 for installation of a solar array.

At the same time, President Obama announced new executive actions to further advance the development of solar technologies across the country which includes commitments from a broad coalition of 50 public and private sector partners, including leading industry, community development organizations and housing providers in 28 states. “USDA is proud to play a key role in Obama Administration’s efforts to promote the use of solar technologies,” Vilsack said. “Of the REAP projects funded today, 240 projects are for solar investments of $5.2 million in grants and $55.3 million in loans.”

In North Carolina alone, Vilsack announced $55.3 million in new REAP program loan guarantees and grants for 22 solar energy projects. For example, USDA is awarding a $3 million loan guarantee to Broadway Solar Center, LLC to help finance a 5 megawatt solar array in Columbus County, a $4.9 million loan guarantee for a similar project in Hertford County and a $2.1 million guarantee for a project in Warren County.

USDA has increased its estimate of the corn crop again this month, building on already forecast record highs. Corn production is forecast at 14.4 billion bushels, up 3 percent from both the August forecast and from 2013 and yields are expected to average 171.7 bushels per acre, almost 13 bushels an acre higher than last year.

“It will be the fifth record crop that we’ve had in the last 12 years,” says National Corn Growers Association Vice President of Public Policy Jon Doggett, who commented on the crop during a during a Fuels America press call Thursday discussing the importance of EPA keeping the ethanol requirements under the Renewable Fuel Standard (RFS) going forward. “When the energy bill was passed in 2008, there was a challenge to the corn industry to produce the corn, and we have produced the corn,” he said, adding that farmers have done it so well that prices have fallen back below cost of production.

As harvest ramps up in fields across the country, corn demand from the ethanol sector is ramping up as well. Dinneen notes that DOE projects 2014 ethanol production will be 14.3 billion gallons. “A decade ago, who would have dreamed that 14 billion bushels of corn and 14 billion gallons of clean-burning, domestically-produced ethanol would be the reality in 2014?,” he said.

Dinneen added that EPA’s proposal to reduce the 2014 RFS requirement for “renewable fuel” from 14.4 billion gallons to 13.01 billion gallons would effectively reduce demand for corn by some 500 million bushels, at a time when corn stocks are rising and prices are slumping to levels below the cost of production. “Now is not the time to artificially constrain demand for corn and tie the hands of the American farmer,” Dinneen said, urging EPA to “finalize a rule that returns the RFS to its intended trajectory.”

“This represents a huge step forward in the development of clean, renewable, job-creating American fuels,” Vilsack said during a speech at the National Clean Energy Conference. “The nation is entering a new energy age that will make us more energy independent, cut carbon pollution and strengthen our economy, especially in rural communities where clean fuels will be produced.”

USDA is awarding Fulcrum a $105 million Biorefinery Assistance Program loan guarantee through Bank of America, N.A. to construct a facility in McCarran, Nev., to convert municipal solid waste to biodiesel jet fuel. USDA Rural Development’s loan guarantee represents less than half of the $266 million project cost. The plant is expected to produce 11 million gallons of fuel annually.

This is the first loan guarantee USDA has made for the production of bio jet fuel.

Researchers working for the U.S. Department of Agriculture (USDA) have developed a variety of switchgrass that produces bigger yields and more biofuel. Rob Mitchell with the USDA’s Agricultural Research Service in Nebraska gives credit to retired geneticist Ken Vogel who developed the Liberty variety of switchgrass.

“He was able to identify an upland type and a lowland type that had similar genetics so they were able to be crossed. He made greenhouse crosses and then took those crosses to the field and right away saw a real big increase in biomass production,” Vogel says.

Field testers in Nebraska and Wisconsin noticed that not only were they getting more biomass, but they were also getting more biofuel out of the biomass produced, in addition to good stand establishment and winter survivability… key points for the Upper Midwest where Mitchell expects the Liberty variety to be grown for biofuels.

“I anticipate that Liberty is going to be at its best in that Central Plains and Midwestern region. It probably won’t go much further south, because they really don’t deal with winter hardiness issues in the southern U.S. like we do in the Central Great Plains and the Midwest,” he said.

USDA Rural Development Energy Coordinator Ron Omann says an additional 50-million dollars of mandatory funding and up to 20-million dollars of discretionary funding have been dedicated to REAP for fiscal years 2014 through 2018, and funding for this year and next are being combined. “We’re going to be putting both ’14 and ’15 monies together which amounts to $100 million total for projects,” said Omann. That includes funding for both the Renewable Energy System and Energy Efficiency Improvement Guaranteed Loan and Grant Program and the Energy Audit and Renewable Energy Development Assistance Grant Program.

Omann says they are working to simplify the application process. “Generally, we want to streamline it and make it less of a barrier to get into it,” he said, adding that they are implementing specific changes in the application process for projects of less than $80,000.

For those interested in applying for REAP funding, Omann says each state has its own template to help with the application process, but it helps to keep it small and simple.
Find out more about REAP here.